Question 1

The ________ is a mathematical technique used for finding the best location for a single distribution point that services several stores or areas.

Accepted Answer

The answer of The ________ is a mathematical technique used...

Question 2

Tangible costs include which of the following?

Accepted Answer

A)  climatic conditions 
B)  availability of public transportation 
C)  taxes 
D)  quality and attitude of prospective employees 
E)  zoning regulations

Question 3

A small manufacturer is considering several locations for a new facility. They have identified four factors that they consider to be important for their location decision. They have decided to assign scores to the four factors, with a higher score indicating a more favorable location. Use the information in the following table to perform a factor rating to select the best location.

Accepted Answer

The answer of A small manufacturer is considering several locations...

Question 4

Substantial research has shown that a successful method of dealing with bottlenecks is to increase the bottleneck's capacity.

Accepted Answer

A) True 
 B)False

Question 5

A full-service restaurant is considering opening a new facility in a specific city. The table below shows its ratings of four factors at each of two potential sites.  The score for Gary Mall is ________ and the score for Belt Line is ________.

Accepted Answer

A)  90; 100 
B)  22; 24 
C)  18; 120 
D)  34; 28 
E)  none of these

Question 6

What is a common method used to increase capacity with a lag strategy?

Accepted Answer

A)  F overtime 
B)  F subcontracting 
C)  new facilities 
D)  new machinery 
E)  A and B

Question 7

The capacity planning strategy that delays adding capacity until capacity is below demand, then adds a capacity increment so that capacity is above demand, is said to ________ demand.

Accepted Answer

The answer of The capacity planning strategy that delays adding...

Question 8

Unfavorable exchange rates can offset other savings in a location decision.

Accepted Answer

A) True 
 B)False

Question 9

Consider the assembly line below. The three fabrication operations run in parallel, such that each batch of 20 units only needs to go through one of the three fabrication operations. After that, each batch needs to go through both assembly operations, which occur simultaneously (specifically, 10 components are made for each unit in the fabrication stage-some components are then assembled in the Assembly 1 area while others are assembled in the Assembly 2 area). The units are packaged and made ready for shipment in the final stage.  What is the bottleneck time per batch of this operation?

Accepted Answer

A)  24 min. 
B)  8 min. 
C)  88 min. 
D)  34 min. 
E)  3 min.

Question 10

Which of the following is usually NOT one of the top considerations in choosing a country for a facility location?

Accepted Answer

A)  availability of labor and labor productivity 
B)  exchange rates 
C)  attitude of governmental units 
D)  zoning regulations 
E)  location of markets

Question 11

Adding a complementary product to what is currently being produced is a demand management strategy used when:

Accepted Answer

A)  demand exceeds capacity. 
B)  capacity exceeds demand for a product that has stable demand. 
C)  the existing product has seasonal or cyclical demand. 
D)  price increases have failed to bring about demand management. 
E)  efficiency exceeds 100 percent.

Question 12

A highway contractor needs to locate a single supply point to provide road building materials to four projects. The four projects, which are all approximately the same magnitude, are located at the following coordinates. Coordinate units are in miles.
  (a) What is the center of gravity?
(b) If a single truck were sent from center-of-gravity to each project and back (four round trips), how many miles would be traveled?

Accepted Answer

The answer of A highway contractor needs to locate a...

Question 13

Which of the following costs would be incurred even if no units were produced?

Accepted Answer

A)  raw material costs 
B)  direct labor costs 
C)  transportation costs 
D)  building rental costs 
E)  purchasing costs

Question 14

A manufacturing company is considering two alternative locations for a new facility. The fixed and variable costs for the two locations are found in the table below. For which volume of business would the two locations be equally attractive? If the company plans on producing 50,000 units, which location would be more attractive?

Accepted Answer

The answer of A manufacturing company is considering two alternative...

Question 15

The reason fast-food restaurants often are found in close proximity to each other is:

Accepted Answer

A)  they enjoy competition. 
B)  location clustering near high traffic flows. 
C)  low cost. 
D)  availability of skilled labor. 
E)  all of these.

Question 16

The World Economic Forum has developed a list that ranks countries on issues such as "competitiveness" and "corruption."

Accepted Answer

A) True 
 B)False

Question 17

What is the fundamental distinction between design capacity and effective capacity? Provide a brief example.

Accepted Answer

The answer of What is the fundamental distinction between design...

Question 18

East Texas Seasonings is preparing to build one processing center to serve its four sources of seasonings. The four source locations are at coordinates shown below. Also, the volume from each source is provided.
(a) Calculate the volume-weighted center of gravity.
(b) Calculate the simple center of gravity (all cities weighted equally).
(c) Explain why the two calculations differ.

Accepted Answer

The answer of East Texas Seasonings is preparing to build...

Question 19

A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next six years. If the cost of capital (i.e., interest rate) is 8 percent, what is the approximate net present value of this investment?

Accepted Answer

A)  $20,920 
B)  $26,160 
C)  $42,460 
D)  $70,920 
E)  $92,460

Question 20

A product sells for $5, and has unit variable costs of $3. This product accounts for $20,000 in annual sales, out of the firm's total of $60,000. When performing multiproduct break-even analysis, what is the weighted contribution of this product?

Accepted Answer

A)  0.133 
B)  0.333 
C)  0.40 
D)  0.667 
E)  $1.667

Exam 8: Location Strategies

The ________ is a mathematical technique used for finding the best location for a single distribution point that services several stores or areas.

Tangible costs include which of the following?

Substantial research has shown that a successful method of dealing with bottlenecks is to increase the bottleneck's capacity.

A full-service restaurant is considering opening a new facility in a specific city. The table below shows its ratings of four factors at each of two potential sites. The score for Gary Mall is and the score for Belt Line is .

What is a common method used to increase capacity with a lag strategy?

The capacity planning strategy that delays adding capacity until capacity is below demand, then adds a capacity increment so that capacity is above demand, is said to ________ demand.

Unfavorable exchange rates can offset other savings in a location decision.

Which of the following is usually NOT one of the top considerations in choosing a country for a facility location?

Adding a complementary product to what is currently being produced is a demand management strategy used when:

Which of the following costs would be incurred even if no units were produced?

The reason fast-food restaurants often are found in close proximity to each other is:

The World Economic Forum has developed a list that ranks countries on issues such as "competitiveness" and "corruption."

What is the fundamental distinction between design capacity and effective capacity? Provide a brief example.

A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next six years. If the cost of capital (i.e., interest rate) is 8 percent, what is the approximate net present value of this investment?

A product sells for $5, and has unit variable costs of $3. This product accounts for $20,000 in annual sales, out of the firm's total of $60,000. When performing multiproduct break-even analysis, what is the weighted contribution of this product?